Blackrock | How bond ETFs are powering a portfolio revolution

May 5, 2026

Today, BlackRock has published new flagship research showing how fixed income ETFs have quietly become the core infrastructure of modern portfolios, just as investors face a pivotal moment on rates, cash, and market uncertainty.

The paper from Blackrock entitled “A durable foundation: How bond ETFs are powering a portfolio revolution” explores how bond ETFs are increasingly anchoring portfolios as investors expand into private markets and digital assets.

Key findings from Blackrock include:

Bond ETFs have scaled rapidly — and proved their value when markets are under stress. Global bond ETF assets have more than doubled since 2020 to over $3 trillion, yet indexed strategies still represent less than 5% of the global bond market, highlighting significant runway ahead. Liquidity has surged in parallel, with bond ETF trading volumes averaging $67bn a day in 2026, spiking to $58bn during the April 2025 tariff shock and $84bn amid the March 2026 Iran conflict.

Income is back. Around 60% of global fixed income now yields above 4%, up from fewer than 20% in 2019—re-establishing bonds as a source of income alongside stability.

Active bond ETFs are gaining momentum as investors seek flexibility. While still only 20% of global fixed income ETF assets, active strategies captured 32% of fixed income ETF flows in 2025, reflecting growing demand for portfolio‑manager discretion delivered through an ETF.

Private markets and digital assets are raising the value of liquidity. Private market opportunities are expected to reach $32 trillion by 2030, while crypto markets now total $2.4 trillion. As portfolios incorporate more illiquid and volatile assets, the research shows bond ETFs are increasingly used as a liquid ballast, helping investors rebalance quickly, manage cash flows, and stabilise portfolios during periods of stress.

For reference, BlackRock’s iShares bond ETF platform now manages $1.2 trillion in assets and saw $46 billion in net inflows in Q1, underlining its role at the centre of this shift.

Fixed Income Insights: For deeper analysis on bond markets and rates strategy for advisers, explore IFA Magazine’s latest Fixed Income Insights publication.